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Allahabad High Court · body

1982 DIGILAW 1047 (ALL)

Satya Prakash v. Krishna Devi represented by L. Rs

1982-09-14

DEOKI NANDAN

body1982
JUDGMENT Deoki Nandan, J. - This is a plaintiffs second appeal in a suit for specific performance of a contract for sale of a portion of a plot of land at Kanpur. The agreement was in writing and was entered into on 29th Apr., 1965 vide Ext. 2. The agreed sale price was Rs. 13,200/- at the rate of Rs. 45/- per square yard, out of which Rs. 3,000/- was paid as earnest money on the execution of the said agreement. The time limit for completion of the sale was one month. The agreement shows that the total area of the plot 122 A was 1793 square yards, and it was recited in the agreement that the sale of the land after sub-dividing the plot into small portions was beneficial to the defendant. The defendant expressly gave warranty of her title by a term of the agreement, which said that if it were found that the defendant did not have good title to sell the land, the plaintiff would be free not to purchase it, and to obtain the refund of the earnest money paid with interest at one per cent per mensem. The agreement further provided that the plot, about which the agreement had been entered into, had a building on the north eastern portion thereof, which was occupied by a third person, and the defendant agreed to get the building vacated by that person and to give actual possession to the plaintiff. The agreement again provided that if the defendant was unable to get the building vacated by that person and to give vacant possession to the plaintiff, he would be entitled not to buy the land and to obtain refund of the earnest money with interest at one per cent per mensem. The agreement also contained the usual term that if the defendant would fail to execute the sale-deed or to have it registered, the plaintiff could either obtain a refund of the earnest money with interest and costs or to obtain specific performance of the contract through court. The time for execution of the sale-deed was extended by a further period of fifteen days by another agreement between the parties, dated 28th May, 1965, which is Ext. 3 on the record. 2. The time for execution of the sale-deed was extended by a further period of fifteen days by another agreement between the parties, dated 28th May, 1965, which is Ext. 3 on the record. 2. After reciting the terms of the first agreement, dated 28th Apr., 1965, the plaintiff alleged that, in the meantime, that is before the expiry of the period of one month, during which the sale-deed had to be executed under the agreement, dated 29th Apr., 1965, it appeared that the defendant could not sell the property without having layout of the plot in suit sanctioned by the Nagar Mahapalika, Kanpur. It was said before me at the Bar that the restriction imposed was by the Regulation of Building Operations Act, 1958, which was in force at that time within the urban area of Kanpur. According to the plaintiff, it was arranged by mutual consent between the parties that he could get a site-plan prepared of the property for the purposes and the necessary application would be moved by the defendant, but, after the plans were prepared, the defendant did not move in the matter, and it also transpired that the defendant's name was not mutated as the owner of the land in the Nagar Mahapalika records. Thereupon, the plaintiff served a notice, dated 25th May, 1965 on the defendant, and it was as a result of that notice that the agreement, dated 28th May, 1965, was executed, whereby the period for execution of the sale-deed was extended up to 13th June, 1965. According to the plaintiff, the extension was allowed because time was necessary to get the eastern portion vacated and to pay the taxes and to have the layout plan sanctioned. Again, according to the plaintiff, the defendant did not cooperate. A map was prepared by the drafts man of the Nagar Mahapalika, for which the plaintiff paid him Rs. 125/- and the draftman granted a receipt on 7th June, 1965 for an application made by the defendant for sanction. But as the last date for the execution of the sale-deed was approaching fast, the plaintiff sent another notice, dated 11th June, 1965, asking the defendant to have the layout plan sanctioned and to satisfy the plaintiff with proof of title and to execute the sale-deed at an early date. But as the last date for the execution of the sale-deed was approaching fast, the plaintiff sent another notice, dated 11th June, 1965, asking the defendant to have the layout plan sanctioned and to satisfy the plaintiff with proof of title and to execute the sale-deed at an early date. The defendant sent a reply saying that the sanction of the layout plan was not an essential condition of the contract, whereupon the plaintiff offered to have the sale-deed completed without the sanction of the site-plan, in case a condition were incorporated in the sale-deed to the effect that if the Nagar Mahapalika withheld the sanction or if the sanction granted would have the effect of reducing any area of the plot sold, the defendant would be liable to reimburse the plaintiff for the proportionate loss of the sale consideration and expenses. According to the plaintiff, he allowed further opportunity to the defendant to execute the sale-deed up to 20th July, 1965, but as no one turned up for the execution of the sale-deed that day, a telegram was sent, and he approached the defendant even after 30th July 1965 to have the sale completed, but the defendant postponed the matter on one excuse or the other saying that the sale will be executed when the sanction from then Nagar Mahapalika is procured. The plaintiff claimed that he is entitled to the specific performance of the contract or, in the alternative, refund of Rs. 3,000/- with interest at one per cent per mensem amounting to Rs. 260/- and Rs. 125/- which was paid for the preparation of the site-plan, total. Rs. 3,385/- with pendente lite and future interest. The suit was filed on 19th Jan. 1966. 3. The execution of the agreement and receipt of the earnest money were admitted by the defendant. The defence was that the contract was made after the plaintiff had satisfied himself about the defendant's title, and instead of complying with the terms agreed upon, the plaintiff sent a notice, dated 25th May, 1965 to the defendant insisting upon new conditions, particularly that regarding sanction of the layout plan by the Nagar Mahapalika and mutation of the defendant's name in place of her late husband's name in the Nagar Mahapalika records within a period of two days, before the sale-deed could be executed. According to the defendant, she " naturally refused to accede to the aforesaid unwarranted demand of the plaintiff' and was willing to execute the sale-deed on the original terms". The extension of time was made in order to enable the plaintiff to arrange for funds. A notice, dated 11th June, 1965, was again sent by the plaintiff insisting upon the obtaining of sanction of the la out plan and asking for an extension by a further period of two months. According to the defendant, she was under no obligation to get the layout plan sanctioned prior to the execution of the sale-deed and was always prepared to execute it on the original terms and conditions. On 20th July, 1965, the defendant's duly authorised representative, was said to have been present along with the clerk in the chambers of the plaintiffs counsel, where the plaintiff was present, but the plaintiff again insisted on the incorporation of new terms and conditions in the sale-deed. These changed terms relating to the sanctioning of the layout plan being not acceptable to the defendant " the negotiations for the sale of the said building came to an end because of the fault of the plaintiff." The written statement proceeds on to state that the plaintiff requested for a further extension of time by three months because he had not be able to arrange the full funds to which the defendant did not agree and under the circumstances she had no alternative but to forfeit the earnest money by the plaintiff and the same stood forfeited". 4. The following were the issues on which the parties went to trial : "1. Whether it was agreed between the parties that they will get the layout sanctioned before the execution of the sale deed? If so its effect?" "2. Whether the defendant did not get the house in suit vacated by tenants and did not satisfy the plaintiff in respect of the title deeds? If so, its effect?" "3. Whether time was of the essence of the contract between the parties? If so its effect?" "4. Whether the plaintiff performed his part of the contract and was ready and willing to get the sale-deed executed?" "5. Whether the defendant committed the breach of contract as alleged?" "6. Whether the plaintiff is entitled to the amount of Rs. 3385/- as claimed in para 9 of the plaint?" "7. If so its effect?" "4. Whether the plaintiff performed his part of the contract and was ready and willing to get the sale-deed executed?" "5. Whether the defendant committed the breach of contract as alleged?" "6. Whether the plaintiff is entitled to the amount of Rs. 3385/- as claimed in para 9 of the plaint?" "7. To what relief if any is the plaintiff entitled?" 5. The trial court found that obtaining of the sanction could not be considered a condition precedent or a term impliedly annexed to the contract of sale, and answered the first issue in the negative. On issue 2, it found that it was premature to say that the defendant failed to get the Kothari existing on a portion of the land in suit, vacated, and further that plaintiff entertained no doubt about the defendant's title to the land and accordingly answered both the parts of the issue in favour of the defendant. On issue 3, the trial court found that time was not the essence of the contract: on issue 4, that the plaintiff was not ready and willing to perform his part of the contract, and on issue No. 5 that it followed as a corollary that the plaintiff committed breach of the contract. On issues 6 and 7, the trial court held that the earnest money was rightly forfeited by the defendant and since it was no part of the defendant's business to get the site-plan prepared and sanctioned, she was not responsible for the refund of the amount of Rs. 125/- said to have been spent by the plaintiff. In the result, the trial court dismissed the suit with costs. 6. The lower appellate court has maintained the dismissal of the suit. 7. Having learned counsel for the parties in this case, I find that it was not disputed that the land could not lawfully be transferred unless the layout plan of the plots, into which it was sub-divided, was sanctioned by the prescribed Authority under section 6, Regulation of Building Operations Act, 1958. Even if the requirement of obtaining the necessary sanction for the development of the plot by sub-dividing it into smaller plots was not specifically made a condition precedent, the defendant was bound to convey a good title in the land sold to the plaintiff. Even if the requirement of obtaining the necessary sanction for the development of the plot by sub-dividing it into smaller plots was not specifically made a condition precedent, the defendant was bound to convey a good title in the land sold to the plaintiff. In Nathu Lal v. Phool Chand, AIR 1970 SC 546 , the Supreme Court held that where by a statute property is not transferable without the permission of an authority, an agreement to transfer it must be deemed subject to the implied condition that the transferor will obtain the necessary sanction of the authority concerned for the transfer. In the present case, although there was no bar to the sale of a specific portion or part of the bigger plot of land owned by the defendant, the site could not be developed for building purposes by dividing it into smaller plots nor could the plaintiff build upon the smaller plot purchased by him unless the layout plan of the sub-division of the plot into smaller plots was sanctioned by the prescribed Authority under the Regulation of Building Operations Act, 1958. It is obvious that the plaintiff had contracted to purchase the land for building purposes. The title of the defendant to the land may not have been defective, but, after her husband's death, her name was not mutated in the Nagar Mahapalika words as the owner of the land. To hay it mutated was the first step. The next step was for the plaintiff to apply for the sanction of the development of the big plot owned by her by sub-division into smaller plots. In sanctioning such sub-division, the authorities sometime insist upon leaving some land for construction of roads and drains etc. The plaintiffs demand that in case the area of the land contracted to be sold was reduced as a result of the sanction of the layout plan for sub-division of the land the sale consideration and expenses on the sale-deed should be refunded proportionately, could not be said to have been unreasonable. But the mutation of the defendant's name and the sanction of the layout plan were time consuming processes. But the mutation of the defendant's name and the sanction of the layout plan were time consuming processes. It is unfortunate that it is so but the fact remains that the public authorities entrusted with such statutory functions, as those contained in the Regulations of Building Operations Act, do not make any attempt to serve the people for their greater welfare, but wield the authority given to them in such a manner as to turn these welfare measures into engines of oppression. The plaintiff could have, if he had so chosen, gone ahead with having the sale as it was, which the defendant could not obviously refuse, but to guard against the possibility of loss by reason of some conditions imposed by the prescribed Authority while sanctioning the layout plan under the provisions of the Regulation of the Building Operations Act, the plaintiff wanted the insertion of an indemnity clause in the sale-deed. Since it was wholly uncertain, when the sanction for the sub division of the big piece of land into small plots would be obtained, and the terms, on which the sanction would be granted, were not known, and without the sanction the land, which the plaintiff had contracted to purchase, would have been more or less useless, as he could not build upon it without a sanction of the building plan, and the building plan would not have been sanctioned unless the sub-division of the site into smaller plots was sanctioned, it was open to the parties to avoid the contract. The plaintiff cannot be said to have committed any breach of the contract by not agreeing to purchase the land without an indemnity being given by the defendant in the sale-deed against loss arising from these contingencies. In a sense, it could be said that the defendant could not have sold sub-divisions of the plot owned by her without first having the layout plan for the development of the site sanctioned by the prescribed Authority under S. 6 of the Regulations of Building Operations Act, 1958. According to the plaintiff, he was prepared to take the sale without waiting for the sanction, provided the defendant indemnified him against loss which may be occasioned by the reduction of the area of the land on such sanction, or in case the sanction was not granted. According to the plaintiff, he was prepared to take the sale without waiting for the sanction, provided the defendant indemnified him against loss which may be occasioned by the reduction of the area of the land on such sanction, or in case the sanction was not granted. Since the two parties failed to resolve the matter by mutual agreement, and instead started blaming each other for non-performance of the contract, and the plaintiff was not prepared to take the sale without the addition of an indemnity clause, specific performance of the contract could not reasonably be enforced at his instance, at any rate, not now after the lapse of seventeen long years since the date of the contract and practical inexpediency, bordering on impossibility of having a layout plan sanctioned by the Prescribed Authority under S. 6, Regulations of Building Operations Act, 1958, more particularly because the place of the Building Operations Act, 1958 and the Prescribed Authority thereunder has in the meanwhile been taken by other statutory provisions and authorities. 8. This leads to the inescapable conclusion that the plaintiff was entitled to refund of the earnest money paid by him. It has been found above that the plaintiff could not be said to have committed any breach of contract. The defendant did have the use of the amount of Rs. 3,000/- that was paid as earnest money, and she refused to go ahead with the transaction by obtaining a sanction for the development of the site under section 6, Regulation of Building Operations Act, 1958. I think she must compensate the plaintiff by payment of interest at the contracted rate of one per cent per mensem, of course up to the date of suit, and at the rate of six per cent per annum pendente lite and future. The amount of Rs. 125/- said to have been spent by the plaintiff on preparation of the plan by the drafts man of the Nagar Mahapalika. Kanpur is in my opinion, not recoverable, for the defendant did not agree to proceed with the transaction after obtaining the sanction which the plaintiff wanted her to obtain. 9. In the result, the appeal succeeds and is allowed in part. The decree under appeal is set aside. Instead, the plaintiff's suit is decreed for recovery of Rs. 3,000/- with interest amounting to Rs. 9. In the result, the appeal succeeds and is allowed in part. The decree under appeal is set aside. Instead, the plaintiff's suit is decreed for recovery of Rs. 3,000/- with interest amounting to Rs. 260/- at one per cent per mensem up to the date of suit, and pendente lite and future at the rate of six per cent per annum with proportionate costs throughout on the amount decreed. The defendant shall bear her own costs throughout.